چکیده انگلیسی

In this paper we model the real cost structures of three customer–supplier relationships through a game theory approach. The three cases demonstrate the benefits of mutual interfirm trust in financially measurable terms. Indeed, interfirm trust can decrease the transaction costs of the relationship, thus providing competitive advantage for the partners. Moreover, we present a pricing arrangement that partially compensates the possible lack of mutual trust. A practical implication is that managers should pay more attention to the role of interfirm trust in partner selection processes.

مقدمه انگلیسی

The importance of interfirm trust has increased as many customer–supplier relationships have become more cooperative by their nature. Thus, several researchers have paid attention to interfirm trust and its benefits from theoretical and empirical perspectives (Das and Teng, 1998a, Zaheer et al., 1998, Blois, 1999, Blomqvist et al., 2002 and Dyer and Chu, 2003). The benefits from trust can be, for instance, reduction of transaction costs, increased information sharing, and willingness to invest in a specific customer–supplier relationship.
Interfirm trust and the benefits provided by it have been measured and evaluated widely by using several approaches (cf. Sako, 1992, Sako and Helper, 1998, Zaheer et al., 1998 and Krishnan et al., 2006). For instance, the IMP group has paid extensive attention on trust in the perspective of business to business relationships (Johanson and Mattson, 1987, Håkanson and Snehota, 1989 and Blois, 1999). Even though this has made the phenomenon both empirically and theoretically structured and understandable, earlier research has not captured and reported the real financial value and benefits of interfirm trust in customer–supplier relationships. The typical way to evaluate the benefits provided by trust has been quantitative questionnaires which do not take into account the real financial effects of interfirm trust (Fynes et al., 2005). Instead, the results of these questionnaires are dependent on the opinions of the respondent and thus, they do not necessarily illustrate the actual situation of the customer–supplier relationship.
In this paper, we provide empirical data regarding the potential benefits of interfirm trust in three different case relationships, which are part of an actual supply-chain. We complement earlier studies by measuring objectively the real financial value of interfirm trust experienced in different customer–supplier relationships using game theoretical approach. In practice, we show how a customer can reduce multi-supplier network's costs by increasing trust. The managerial coordination target is comparable with the approach of Chiou et al. (2007), but the coordination is here directed towards optimisation of supplier base instead of pricing algorithms with retailers. This helps further direct the research and managerial practises regarding customer–supplier relationships.
The rest of the paper is organised as follows: Section 2 describes the conceptual background of the study. Section 3 illustrates the research design and empirical data. In Section 4 we present a game theory model of inter-firm trust, which we use in Section 5 to analyse the empirical evidence of the case study. Finally, Section 6 discusses the contributions, limitations and managerial implications of the paper.

نتیجه گیری انگلیسی

The primary contribution of this study was to bring out empirical, financial evidence of the benefits achieved from mutual interfirm trust in a supply chain consisting of several customer–supplier relationships. Similar to prior research, our findings highlight that high trust can provide significant benefits in inter-organisational relationships and networks (Barney and Hansen, 1994, Gulati, 1995, Zaheer et al., 1998, Carson et al., 1998, Kajüter and Kulmala, 2005 and Krishnan et al., 2006). We have complemented earlier studies by illustrating the benefits provided by interfirm trust in financially measurable terms. The financial effects of trust are calculated in Fig. 2 and Fig. 4. Without high mutual interfirm trust, the centralisation of maintenance purchases leads to unwanted behaviour from the supplier's side and eventually leads to lower total benefits than in the case of high mutual trust. Indeed, in our case mutual high trust leads to annual benefits of several thousands of Euros, in contrast to the zero utility of mutual low trust.
In the perspective of this study, mutual trust can be seen as a valuable resource for both customer–supplier relationships and complete supply chains. The presence of mutual trust may enable cooperative arrangements providing benefits for both sides of the relationships. These arrangements are difficult to imitate due to the socially complex and rare nature of trust. Thus, the parties of the relationship can gain competitive advantage in the networked economy where competition occurs especially between supply chains. This supports the study of Barney and Hansen (1994), who argued that strong trust can be a source of competitive advantage if it is present mutually in the exchange relationship.
The empirical evidence of this study also demonstrated the role of interfirm trust as a governance mechanism in customer–supplier relationships. For instance, extensive, mutually beneficial pricing agreements are not necessary if sufficient level of mutual trust is present. Trust is favoured, because the use of contracts as a replacement for trust increases transaction costs especially in the field of negotiation. Therefore, our study is in line with the research of Dyer and Chu (2003) who presented how the trustworthiness of a buyer decreased the amount of transaction costs measured as a buyer's procurement productivity. Complementing those notations, our findings suggest that interfirm trust also decreases the supplier's negotiation costs. This is how trust can provide significant cost benefits for both sides of the relationship.
This study complements the research branch of integrated supplier selection and purchasing policies, which has been an important discussion topic during last years (Liao and Rittscher, 2007). The role of interfirm trust was noted to be important in the customer's partner selection process. A managerial implication is that by selecting trustworthy suppliers as targets of centralisation, the customer can achieve notable benefits due to decreased need for contractual governance in the whole supply network. This supports the views of Das and Teng (2002) along with Stewart (2003), who have argued that trust affects significantly the partner selection and buying decision of a customer. In addition, the use of elastic pricing arrangement should be considered if there is no mutual interfirm trust between the customer and the supplier. This results in similar but slightly smaller benefits as with trust.
To further test our trust game model or the elastic pricing arrangement, an interesting aspect would be to use them in other institutional environments. This would provide information about the attitudes towards interfirm trust as a governance mechanism and a source for competitive advantage in other cultures. Similarly, the models presented in this study can also be tested in other industries and thus provide more comparable empirical data to our findings. Finally, an interesting topic for further research would be to include different pricing strategies in the suppliers’ decision-making.